NORTHRUP

December 18, 2012 Attn: Draft HVHF Regulations Comments New York State Department of Environmental Conservation 625 Broadway Albany, NY 12233-6510 Re: Property Rights Ignored by Proposed Regulations Revised Proposed Express Terms 6 NYCRR 552.1 (b) and 553.1 (a) Summary The proposed regulations fail to recognize property boundaries in any respect. Property lines are not mentioned anywhere in the regulations, except in the context of subterranean mineral rights. This is in direct violation of the enabling legislation, ECL Article 23, the stated purpose of which is as follows: It is hereby declared to be in the public interest:

to regulate the development, production and utilization of natural resources of oil and gas in this state in such a manner as will prevent waste; to authorize and to provide for the operation and development of oil and gas properties in such a manner that
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a greater ultimate recovery of oil and gas may be had, and that the correlative rights of all owners and the rights of all persons including landowners and the general public may be fully protected, and1

Clearly, in order for the surface rights owner, the landowner, to be fully protected, their property rights the boundary of their property, must be acknowledged in these regulations, or the regulations will be in direct violation of the purpose of ECL 23.

http://www.dec.ny.gov/energy/26498.html 1

Failure of the Regulations to Consider Property Boundaries in Permit Issuance The proposed regulations require a plat that shows the extent of the subterranean rights, the mineral rights in question when permitting a well. There is no requirement for a property (surface boundary map), which may or may not be conterminous with the mineral lease: "6 NYCRR Part 552, Permits to Drill, Deepen, Plug Back or Convert Wells Subdivision (a) and (b) of Section 552.1 is revised and a new subdivision (c) is added to read: (b) Each copy of the application must be accompanied by a neat, legible plat which has been certified as to correctness by a licensed land surveyor or licensed civil engineer. The plat must be drawn to scale and show the boundaries of the lease or unit containing the well, the distance in feet from the well to the two nearest boundaries, the distance in feet from the well to the nearest plugged and abandoned well [completed in the objective pool] subject to Part 552 (if same is within one mile) and the distance in feet from the well to the nearest producing well (if same is within one mile). " Note that the only surface featured required in this mapping is the location of another well, of up to a mile away. 2 Likewise, well spacing invokes ECL 23, but fails to recognize surface property boundaries. See for instance, 553.1 (a) (6) which calls for a 330 foot setback from the mineral rights boundary, which may in fact be on another (surface) property:

6 NYCRR Part 553, Well Spacing (Statutory authority: Conservation Law, 70, 73, 75, 77 , Environmental Conservation Law 23-0501, 23-0503 ) Subdivisions (a) through (c) of Section 553.1 are re-lettered subdivision (d) through (f), and new subdivisions (a) through (c) are added to read: (a) 'Statewide spacing' means spacing units for gas or oil wells that are within ten percent of the following sizes, as applicable, unless another percentage is specifically stated: (6) For shale gas pools at any depth, for a horizontal well outside any existing spacing unit for the same formation and with a written commitment from the well operator to drill infill wells pursuant to subdivision (c) of this section, notwithstanding the ten percent tolerance ,
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http://blog.shaleshockmedia.org/2012/10/09/biggest-setback-in-the-dsgeis/

up to 640 acres with the initial horizontal wellbore or wellbores within the target formation approximately centered in the spacing unit and no wellbore in the target formation less than 330 feet from any unit boundary; The problem with ignoring surface boundaries is citing wells is threefold: 1. Split Estate - If the mineral rights are severed from the surface rights, the spacing unit setbacks may suffice to protect the correlative rights of mineral rights owners, but the rights of the surface owner are virtually unprotected by being completely ignored. 3 The well can go anywhere on their property (which is not even mapped) with the exception of a few token setbacks for surface uses set forth in 560.4. 4 2. Compulsory Integration The problem of the Split Estate is compounded when the property owner is compelled to participate into the spacing unit, in which case the boundary of their mineral rights govern well location, but their surface property rights the location of their other buildings, roads, pastures, etc. are ignored.5 In terms of surface rights, compulsory pooling in New York is a Hobsons Choice.6 3. Setbacks Inadequate Assuming that the surface property boundary was not breached by the spacing unit boundary via the Split Estate or Compulsory Pooling, the surface rights owner is still at the mercy of the setbacks in the spacing unit. And those setbacks are not sufficient to protect the landowner. The 330 foot well setback in 553.1 (a) (6) would be sufficiently close to render an adjacent property unsalable, unfinanceable, and uninsurable,7 since spacing units regulations, without reference to surface features and property lines, were never intended to protect the built environment and do not protect surface rights and uses. Well spacing and setback of wells from spacing unit boundaries were suggested to the DEC staff by Chesapeake Energy's lobbyist.8 When the DEC refers to "correlative rights" they are
3

http://blog.shaleshockmedia.org/2012/12/07/fracking-your-back-yard/

http://www.scribd.com/doc/116960614/Response-to-Proposed-New-York-FrackingRegulations 5 http://www.scribd.com/doc/74790533/Compulsory-Integration-in-New-York 6 http://www.scribd.com/doc/106647400/NY-Compulsory-Integration-Law 7 http://www.scribd.com/doc/70784790/Fracking-the-Homestead

8

http://www.scribd.com/doc/98812091/Who-Writes-New-York-s-Fracking-Regulations

referring to rights between subterranean mineral rights owners - not surface property rights. Such lack of recognition of surface property rights is clearly in violation of ECL 23.

James L Northrup 17 River Street Cooperstown, New York 13326